BEFORE THE U.S. DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

2010 U.S.-HANEDA COMBINATION SERVICES ALLOCATION PROCEEDING Docket DOT-OST-2010-0018

CONSOLIDATED REPLY OF ALASKA AIRLINES, INC. AND HORIZON AIR INDUSTRIES, INC. d/b/a HORIZON AIR

Communications with respect to this document should be addressed to: Kyle B. Levine, Esq.Associate General CounselCommercial Law and Litigation Alaska Airlines, Inc. 19300 International Boulevard Seattle, Washington 98188 Marshall S. Sinick, Esq. Edward W. Sauer, Esq. Squire Sanders and Dempsey, LLP 1201 Pennsylvania Ave., NW Washington, DC 20004-0407 202-626-6600 msinick@ssd.com esauer@ssd.com Counsel to Alaska Airlines, Inc. and Horizon Air Industries, Inc. d/b/a Horizon Air Megan Lawrence, Esq. Managing Director, Government Affairs & Community Relations Alaska Airlines, Inc. 19300 International Boulevard Seattle, Washington 98188

Dated: March 8, 20101 BEFORE THE U.S. DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

2010 U.S.-HANEDA COMBINATION SERVICES ALLOCATION PROCEEDING Docket DOT-OST-2010-0018

CONSOLIDATED REPLY OF ALASKA AIRLINES INC. AND HORIZON AIR INDUSTRIES, INC. d/b/a HORIZON AIR Alaska Airlines, Inc. (“Alaska”) and its a ffiliate Horizon Air Industries, Inc. d/b/a Horizon Air (“Horizon”) respectfully reply to the answer of Continental Airlines, Inc. (“Continental”) and United Airl ines, Inc. (“United”) to the extent those answers oppose the Department’s selection of Seattle as a new gate way for U.S. carrier service to Japan’s Haneda Airport and, in that regard, Delta’s application to provide Seattle-Haneda nonstop service. This reply similarly addresses those portions of C ontinental’s and United’ s answers opposing the selection of Los Angeles as a new gateway to Ha neda and the applications of both American and Delta to provide the first U.S. carrier nons top service between Los Angeles and Haneda. If the Department decides to select only one West Coast gateway for new Haneda service, Alaska and Horizon would strongly support the De partment’s selection of the Seattle gateway and Delta’s proposal to provide daily nonstop servi ce. However, if the Department should decide to select two West Coast gateways, Alaska an d Horizon would also re commend Los Angeles as the second West Coast-Haneda gateway and the sele ction of either Delta or American to provide new Los Angeles-Haneda nonstop serv ice. Alaska and Horizon’s s ubstantial presence in Seattle2 and Los Angeles would materially enhance the bene fits to the traveling public of Delta’s as well as American’s proposed West Coast-Haneda services. Alaska and Horizon have comprehensive ma rketing relationships, including reciprocal frequent flyer programs, with Delta and America n. Alaska’s and Horizon’s ability to carry a substantial number of passengers to and from in ternational gateways at Seattle and Los Angeles would allow U.S. and Asian passengers travelin g between Seattle or Los Angeles, on the one hand, and Japan’s Haneda Airport, on the othe r, the convenience of frequent, well-timed connections to points throughout th e U.S., Canada and Mexico. Alaska and Horizon would like to assure the Department that they have ever y intention of maximizing their Seattle and Los Angeles networks to enhance the connectin g opportunities for both Delta and American passengers. Indeed, under Alaska’s and Horizon’ s alliance agreement with Delta, both carriers committed to providing incremental connecting flight s to further enhance the travel experience of Delta’s connecting passengers. At Seattle, Alaska and Hori zon account for approximately 48 percent of all enplaned passengers carrying nearly 7.4 million passengers in the 12 months ended August 2009. Alaska and Horizon operate 1787 weekly nonstop flights serving 69 des tinations in Alaska, Canada,

Mexico and the “Lower 48. 1 Beyond those telling metrics of Al aska’s and Horizon’s substantial Seattle presence, it is also generally ackno wledged that Alaska enjoys a well-deserved representation for providing a superi or level of service which has contributed to Alaska’s loyal passenger base. At Los Angeles, Alaska and Horizon carried more than 1.6 million passengers in the 12 months ended August 2009, making Alaska the largest U.S. car rier between Los Angeles and

1 Alaska and Horizon’s August 2010 schedules.3 Mexico. Alaska operates 323 weekly flights and serves 25 destinations in Alaska, Canada, the “Lower 48” and Mexico on a nonstop basis. Alaska and Horizon would also like to respond to United’s assertion that the Department should disregard the Alaska/Horizon beyond Seattle and Los Angeles 2 flights Delta depicts in its exhibits. United bases its argument on the fact that, since Delta does not control the schedule times of Alaska’s and Horizon’s flights, the comparative marketplace value of Delta’s

Alaska/Horizon connections shoul d be heavily discounted. Unite d could not be more wrong.

Alaska and Horizon work closel y with both Delta and American in an effort to optimize connecting flight options and to minimize conn ecting times. The value and importance to

Alaska and Horizon of attracti ng longhaul international connectin g flights has always been a priority consideration in Alaska’s scheduling of its flights – and th at will not change. A reliable

barometer of Alaska’s focus on in ternational longhaul c onnecting traffic is the fact that Alaska and Horizon in 2009 connected nearly 62,000 pa ssengers traveling to /from Asian cities.

CONCLUSION

Alaska and Horizon can transfer significant volumes of Hane da connecting traffic at its Seattle gateway as well as at its Los Angeles gate way and, if the Departme nt decides to select only one West Coast-Haneda gateway, Alaska a nd Horizon would urge that Seattle be that gateway with Delta’s proposed service. However, if the Department decide s to select two West Coast gateways, Alaska strongly su pports Los Angeles as the sec ond gateway with either Delta’s or American’s proposed service.

2 See United Answer at 6 and 14 n. 14; United Exh. UA-A-5.4 Respectfully submitted,

___________________________________ Marshall S. Sinick, Esq. Squire Sanders and Dempsey, LLP 1201 Pennsylvania Ave., NW Washington, DC 20004-0407 202-626-6600 Counsel to Alaska Airlines, Inc. and Horizon Air Industries, Inc. d/b/a Horizon Air Dated: March 8, 20105 CERTIFICATE OF SERVICE I hereby certify that copies of the foregoing Consolidated Re ply of Alaska Airlines, Inc. and Horizon Air Industries, Inc. d/b/a Horizon Ai r has this day been serv ed by electronic mail on the following:

carl.nelson@aa.com Robert.wirick@aa.com Thomas.bolling@coair.com dan.weiss@coair.com hershel.kamen@coair.com rbkeiner@crowell.com gmurphy@crowell.com Julie.oettinger@united.com bruce.rabinovitz@wilmerhale.com david.heffernan@wilmerhale.com jhill@dowlohnes.com perkman@dowlohnes.com ldeavers@dowlohnes.com hoyt.zia@hawaiianair.com mark.arimoto@hawaiianair.com sascha.vanderbellen@delta.com esta.rosenberg@dot.gov

Marshall S. Sinick, Esq. Dated March 8, 20106 EXHIBIT 1